The Heating Oil Watch
East Coast distillate inventories have been on the decline since the end of August, a time when they normally build ahead of winter. Distillate stocks in the Northeast, the Nation's largest heating oil market, typically peak in November, to help meet peak heating demand during the months of December, January, and February. Weekly data show the total East Coast distillate inventories peaking on August 26 and dropping 4.7 million barrels by October 28, an average draw of 75,000 barrels per day (bbl/d) (Figure 1). Last year during this same period, in contrast, distillate stocks were higher, and changed very little. This year's counter-seasonal decline is mostly coming from the Central Atlantic, a region serviced by several product pipelines from the U.S. Gulf Coast. This region includes New York Harbor, the delivery point of the New York Mercantile Exchange (NYMEX) heating oil and reformulated gasoline blendstock for oxygenate blending (RBOB) futures contracts, that also serves as a distribution point for much distillate moving to New England.